Wall of private equity cash drives near €20bn Irish M&A frenzy

Private-equity groups from the United States and elsewhere with access to "unprecedented amounts of capital" drove a surge in dealmaking in the Irish market in the first six months of the year, according to a review by corporate law firm William Fry.

The firm tracked 106 mergers and acquisitions in year to the end of June, up by a third on the same period in 2020, with a total value of €19.6 billion. The aggregate figure dwarfs the €2.4 billion worth of deals announced for the first half of 2020, as the corporate world pivoted to cope with the pandemic.

William Fry said a burgeoning level of “megadeals” are a feature of the Irish M&A landscape currently, with nine deals in the first half of 2021 worth above €500 million, which was three times the total for all of 2020. Using data from Mergermarket’s database, the firm said six deals broke the €1 billion mark.

The largest deal by far in the first six months of 2021 was AIB's €4.1 billion purchase of a loan book from Ulster Bank, which is retreating from the Irish market. Other notable deals included Bain's €1.7 billion buyout of Valeo Foods, which owns brands such as Odlums and Batchelors, and the €3.3 billion takeover of UDG Healthcare by Clayton, Dubilier & Rice.

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The €497 million buyout of the Conor McGregor-backed Proper No.Twelve Irish Whiskey brand by Proximo Spirits scraped into the top 10, in joint position with a similarly-valued takeover of Fenergo by US investors. Private-equity transaction accounted for half of the total value, while inbound takeovers of Irish-based companies by foreign buyers were worth about €15 billion. The technology, media and telecoms sector was among the hottest areas.

"There was a degree of pent-up demand after the pandemic-related slowdown of 2020," said Stephen Keogh, the William Fry partner who heads up its corporate and M&A practice. He added, however, that a slowdown is not yet in sight as the level of inquiries by buyers, in particular US-based private equity, is continuing to hold up.

“The number of megadeals is remarkable. Activity has come back with a vengeance. Private-equity funds are continuing to see waves of money sloshing into their funds. There is no immediate slowdown in sight.”